Posts Tagged ‘chapter 7’

The Means Test for Bankruptcy- Warren Attorney, Mike Greiner


Hi. I’m Mike Greiner. I’m an attorney with the Financial Law Group here located in Warren and we specialize in bankruptcy law here at the financial law group. Our phone number is 586-693-2000. Our website is financiallawgroup.com. And I’m here to talk to you today about the means test for bankruptcy.  A lot of people are concerned that since the change in the law a few years ago, that they might not be eligible for chapter 7 bankruptcy anymore. And what I’ve found is that most people that come into my office who are concerned about that, are actually eligible for chapter 7 bankruptcy. In fact, right before the law changed there was a big rush by people to file bankruptcy thinking that they wouldn’t be able to file bankruptcy after the law changed and really, for most of those people, they could have easily filed Chapter 7 bankruptcy.

The requirements for income for your household size are actually quite high and most people who would be eligible for chapter 7 bankruptcy because of the fact that they have a lot of debt would still be eligible for chapter 7 bankruptcy under the, under thee change in the law. The big change in the law was the means test. The means test only applies if most of your debts are related to your consumer affairs as opposed to business affairs. So if you’re a business person and you’ve accumulated a lot of debt related to your business affairs then to start with, the means test doesn’t even apply to you so you don’t even have to worry about it from that point.

Then what happens is the means test looks at the average household income for you.  Your household is the total size of all the dependents that you’ve got living with you. Just because someone’s not a dependent for tax purposes doesn’t mean they’re not a dependent for bankruptcy purposes. So, say you’ve got a son or daughter who’s 25 years old, living with you. That person might not be someone you can claim on your taxes as a dependent, but may still for all practical purposes be a dependent of yours. And so, as a result, the courts have ruled that they could be dependent for bankruptcy purposes. So that also helps expand the size of your household.

Similar situation could be an elderly relative who’s living with you may only receive Social Security. Then what you do is you take a look at all the household sources of income and add them together for the last 6 months and divide that by 6. You come up with an average monthly income over the last 6 months and then that amount gets compared to the average household income for a family the size of your household in Michigan. And you should know in terms of income certain types of income are excluded from this. For example Social Security income, anything related to the Social Security Act and that includes for example unemployment compensation. Those are not considered income for the purposes of the means test. So again that could be something else that makes you eligible for the means test where you might not have thought you were eligible for it. Then if your higher than the average household income for family or size in Michigan, then you continue on. You can take certain deductions, to see if those deductions make it so your eligible. So say for example, if you have high child care costs. If you have to pay child support or alimony. If you have a higher mortgage payment, often times that can make it so you’re eligible for chapter 7 bankruptcy, where you might have been in the past. Also, you can take deductions for charitable contributions you make. If you make regular charitable contributions, to church. Say for example, a lot of my clients have tithed. And for them, that would be the type of thing that would be a deduction that you can take on the Means test.

I’ve also had clients who have union dues, or large deductions for insurance- health insurance, for example, or even disability insurance. Those would be deductions you can take. Life insurance, term life insurance would be a deduction you can take. So, you can see there are a lot of deductions that you can take that might be able to make you eligible for Chapter 7 bankruptcy, where you might not have been eligible for Chapter 7 bankruptcy in the first place.

My suggestion is come into my office. Give us a call 586-693-2000. I’ll be happy to sit down with you and look at all your sources of income. And talk with you about your situation and see if you are eligible for Chapter 7 bankruptcy. But don’t just assume. Because of the fact that if you look at the kind of income you have coming into your household that’s more than you thought would make you eligible for chapter 7 bankruptcy, don’t assume that your automatically ineligible, cause there could be ways working through the means test, that you would become eligible and certainly worth taking the time to look at.

Posted by Michigan Bankruptcy Attorney - Michael Greiner Sep 02, 2011
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Losing Assets Through Bankruptcy- Attorney Mike Greiner of Warren, Michigan


Hi, my name is Mike Greiner and I’m a bankruptcy attorney with the financial law group located here in Warren, Michigan. Our phone number is (586)693-2000 and our website is financiallawgroup.com. And I’m here to talk to you today about a concern that a lot of my clients have which is whether they’re going to lose assets as they go through a bankruptcy. And the truth of the matter is, is that for most of my clients they do not lose any assets as they go through a chapter 7 bankruptcy or a chapter 13 bankruptcy. We’re able to protect them with something called exemptions. What exemptions are is there’s something  into the law to allow you to  protect assets. The theory behind chapter 7 bankruptcy is that you get rid of all your debts and all your assets, and that’s the way it works with a business when a business files chapter 7 bankruptcy.

But with individuals, Congress understood you can’t do that, that you still need a home, you still need transportation, you still clothing, you still need household goods and furnishings. You still the kinds of things that you would normally need to live a normal life.  And so those things are protected up to a certain value as your going through a bankruptcy case. For most of my clients where you have a home with a mortgage on it, you might have a vehicle or two, you might have a car loan, all those things can typically be can be protected. It’s very rare when someone has enough assets their, that they loose something through a bankruptcy case.

What I’m able to do as we prepare the documents. I’m able to do an analysis and determine if there is any concern that any of these assets will be lost. Again, it’s very rare that anybody actually loses any assets their going through a bankruptcy case. One thing that a lot of people also are concerned about is say you’ve got a mortgage on your home or a car loan on a vehicle, will that mean that that, that that would be a loss you go through in a bankruptcy case? And the truth is if you want to keep that and you can stay current on your payments, most cases you are able to keep those assets as you go through the bankruptcy case. With vehicles for example we do something called a reaffirmation agreement. And what that allows you to do is just keep making the payments on the vehicle and as long as you stay current on your payments you’ll get to keep the car. We do a similar thing with the mortgage, where again just continue making your mortgage payments.

As long as you stay current on your mortgage payments you’ll be able to keep your home. If you are thinking about bankruptcy and are concerned if you might lose some assets again, I urge you to talk to me because in most cases we’re able to protect them. I do offer free consultations. We’d be happy to discuss your options with you. Again, my name is Michael Greiner with the Financial Law Group. Our phone number is 586-693-2000 and our website is FinancialLawGroup.com.

Posted by Michigan Bankruptcy Attorney - Michael Greiner Aug 27, 2011
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Personal Guarantees

Hi, I’m Mike Greiner. I’m a bankruptcy attorney here at the Financial Law Group in Warren, Michigan in Macomb County. Our website is www.financiallawgroup.com and our phone number is (586) 693-2000. I’m here to talk to you today about personal guarantees on business debts.

Something that a lot of people think is that when you have a business, that you’re not going to be liable for the debts that, that you have for the business and that can be true for a lot of the suppliers and other kind of trade debts that you would have. However, when you typically will have a bank loan or a credit card that is a business debt usually there will be a personal guarantee associated with that. Now what that means is even though the debt is a business debt and even though you’ve used that debt for business purposes typically you will be personal liable for that debt just like you would be for personal credit card even though it’s purely something that you used for business purposes and purely something that you used on the base of the business in fact.

Business credit cards typically will not be granted to anybody unless there is a personal guarantee. And that’s usually true also for s.p.a. loans, and other kind of bank loans that would be involved in business cases. So the concern that a lot of people have is that they think that if they shut down a business, that they won’t have to pay on any of these debts anymore. The truth is that usually those debts will follow you, unless you deal with a personal bankruptcy or do some kind of debt settlement. For your personal liabilities for these debts, what makes matters worse a lot of the time is many SBA loans also include a mortgage that is secured by your home. There can be some complex legal issues that need to be addressed to resolve your personal financial liability for any kind of these business debts. Now one thing that’s good about business debts is that there is a different standard that applies.

On the means test for business debts opposed to consumer debts. Let me explain what, what I’m talking about here. When the law changed about five years ago, there was something called a means test that looks at your income, that looks at the size of your household and looks at certain specific deductions you can take to determine if you’re eligible for Chapter 7 bankruptcy.  Well, one of the good things is, is that that means test really only applies if the bulk of your debts are consumer related not business related. However, if you’re a small business person and the bulk of your debt actually are business debts then what that means is that you don’t even have to pass that means just to be able to be eligible for chapter 7 bankruptcy.

So one thing that is good is that you’ll have certain options available to you if most of your debts are business debts as opposed to personal debts and what’s more is the course of rules that even if a debt is a personal debt where you are personally liable for let’s say a credit card that’s a personal credit card if you use those credit cards and those debts for business purposes, and that still applies. An example of business debt is a landlord who owns a lot of real estate but they have a lot of mortgages on all those pieces of real estate. Those would be considered business debts. So you might be eligible for a Chapter 7 case where, because of your income, you might not have been eligible otherwise. So there are some options that are available to people. But what I would strongly suggest someone to do is to talk to a bankruptcy attorney if you’ve got business debts.

Something that’s surprising to a lot of people is that you can often be held liable for them personally, even though they really are business steps. Again with The Financial Law Group here in Warren Michigan, And our phone number is 586-693-2000. And our website is financiallawgroup.com.

Posted by Michigan Bankruptcy Attorney - Michael Greiner Jul 15, 2011
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Bankruptcy Attorney- Chapter 7 Bankruptcy

Hi, my name’s Mike Greiner. I’m a bankruptcy attorney here at the Financial Law Group located in Warren, Michigan. Our website is financiallawgroup.com and my phone number is 586-693-2000. We do offer free consultations for people who are interested in this process. I’m here to talk to you today, though, about the process of Chapter 7 bankruptcy a little bit. Now something that a lot of people are concerned about is what’s going to happen as they go through this process. Let me just tell you a little bit about the basic steps you’re, that’s going to happen. The first thing is you’ll meet with me or another bankruptcy attorney and it’s a matter of filling out the forms and getting them ready to be filed with the bankruptcy court. That’s usually the type of thing you will do with a bankruptcy attorney. Now before the case can actually be filed, your required to do a certain credit counseling. The credit counseling can usually be done over the phone or over the internet and in our case at least, we’ll set you up with a credit counseling company that will take care of that for you. The cost of that often times if 40 to 50 dollars and in our case, we actually include that in the cost we quote you.

Once you’ve completed the first credit counseling, we file the case. After the case has been filed, you have a couple of things you need to do. The first one is, you need to do a second set of credit counseling. That is a requirement, and if you do not do that, your case will be dismissed and you will not receive your discharge. It can be very expensive to re-open your case and to get your case started back up again to get your discharge. So I definitely suggest that people do that second set of credit counseling relatively soon after they file their case. You have a little bit of time, but don’t let time pass. That’s the first thing. The second thing is there’s a hearing. It’s called the first meeting of creditors. Typically, that hearing is held about six weeks after you filed your case. Usually you will not see a judge. Usually, you will just see someone called a trustee. The trustee is an attorney appointed by the court to represent your creditors. That attorney gets to ask you questions, really to verify the information your bankruptcy petition. If your petition’s properly prepared by a bankruptcy attorney usually it will go pretty smoothly.

Before the meeting, there is a requirement that certain documents will have been sent to the trustee. Typically, in a bankruptcy case that we’re handling, we will take care of sending those documents ahead of time. And they include things like tax returns, pay stubs and real estate documents and titles to vehicles you have a loan on. Those things are usually sent to the trustee ahead of the hearing. So when we get to the hearing, usually, the trustee has already reviewed documents and is familiar with your case if everything’s been handled appropriately. And the typical hearing, you’re really talking lasting 5 minutes or so.

If you have a bankruptcy attorney representing you like in our case we will actually sit with you during the hearing, and we’ll help you through it. And make sure that everything gets covered appropriately. And that your interests get looked out for. Once the hearing has been held in most districts across the country there you don’t need to go to a second hearing unless some issue comes up in your case. There’s a two month waiting period to see if any issues come up. If your case has been properly handled, usually the bankruptcy attorney will be able to tell you if you have any issues to be concerned about as you’re going through your case. But if any issues do come up, they can be addressed. Just because someone objects to your case for one reason or another doesn’t mean your case is over. It can be resolved so that needs to be kind of worked through with the assistance of your bankruptcy attorney. But 90% of the cases or so, even more actually than that at the end of the two month period, no issues have come up and the court will simply move forward and send you a discharge. That discharge is kind of anticlimactic. It’s a one page document with one line written on it, typically saying it appearing to the court that you are entitled to a discharge. A discharge is hearby granted and it’s not even signed any more by the bankruptcy judge. It just has a slash s slash and the judge’s name uh, signifying the judge’s signature.

That document, even though it seems very insignificant, is a very significant document. Because that’s essentially your proof for the rest of your life that any debts that were incurred before you filed bankruptcy are there, that they’re not allowed to collect from you.

It’s a court order, and an injunction stopping any creditors from trying to collect, any of these debts or anything. Now one last thing I wanna raise here.

Is just because you’ve received your discharge does not necessarily mean you’re case is over. Your case has to be closed. If there are any assets that remain that the trustee is reviewing those  assets may still be administered, may still try to be sold or get some kind of value out of them to benefit the creditors even after your, after you received your discharge. So really, the key you need to be looking for is to make sure that your case has been closed cause that’s when really your case is over for all intensive purposes.

So again these are the types of things that your bankruptcy attorney can help you through. If you live in Southeastern Michigan  feel free to give my office a call. I offer free consultations. My office number is (586) 693-2000. And our website is financiallawgroup.com

Posted by Michigan Bankruptcy Attorney - Michael Greiner Jul 15, 2011
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Filing Bankruptcy Without An Attorney

Hi, I’m Mike Greiner. I’m a Bankruptcy Attorney located in Warren, Michigan in Macomb County. I’m also the Author here of Bankruptcy 101. Which is a book about how to file bankruptcy on your own without an attorney. I’m also the creator of www.myeasy7.com, which is a website that goes along with this book and can help you file Chapter 7 Bankruptcy on your own without a Bankruptcy Attorney. A lot of people ask me, why would a bankruptcy attorney like you help people file bankruptcy without an attorney. Well the truth of the matter is, there are certain Chapter 7 Bankruptcy cases that are more straightforward that do not necessarily require an attorney to help you through the process. It’s your right to represent yourself in a Chapter 7 Bankruptcy case and I’ve seen where people have done that. One way or another and that’s what they want to do. What I want to do is help people know the process because it can be a complicated process.

With the right tools, which include this book and the website, www.myeasy7.com, you can do it on your own again if you have a relatively straight forward Chapter 7 Bankruptcy case. If you want to find out more, visit www.myeasy7.com and I do have a blog on myeasy7.com that explains many of your questions. Again the website is www.myeasy7.com.

Posted by Michigan Bankruptcy Attorney - Michael Greiner Jun 14, 2011
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